Energy Briefs
THE Bureau of Public Enterprises, BPE, has opposed the reversal of the privatisation of the country’s power sector despite calls on the government from different quarters to repossess the power generation and distribution companies. Alex Okoh, director-general, BPE, said renationalisation’ of the power sector would be a fundamental error.
The BPE boss, who identified the implementation of the design of the reform of the power sector and the dynamics of retailing power as the major challenges, also proposed the introduction of subsidy on tariffs. Reacting to the planned review of the privatisation, as well as calls for recapitalisation of the Discos, Okoh said: “Recapitalising the Discos, will it solve the problem? Maybe, maybe not.
“But what I will not advocate as an individual is the re-nationalisation of the power sector. If we are able to determine that there is a certain level of capital expenditure that is necessary to improve the distribution infrastructure, let us logically determine what that investment is and look at the best way to provide that investment for the distribution end of the power chain and not to re-nationalise the power sector.
“It will be a fundamental error if we go in that direction. The problem is not the privatisation of the Discos or the entire power value chain. The problem is the implementation of the design of the reform of the power sector. We have problems with Discos; we don’t have problems with Gencos.
“The Gencos were also privatised. How come the Gencos are doing well but the Discos are not doing well and they are in the same sector? The Discos are failing because the market dynamics of retailing power is not right,” he said.
Noting that the Discos made a commitment to improving the efficiency of power distribution, while the government promised to provide an enabling environment, Okoh said there was a need for the appropriate tariff. “In case that price is not considered appropriate to be passed on to the consuming public, there will be some sort of subsidy but at the end of the day, the provider of the utility has to be able to recover the cost of providing that utility.
“We need to address the price structure of that utility and where we as a government find that it is not socially imperative to pass on the full cost, then perhaps we need to come in with some sort of subsidy.”
– Feb. 14, 2020 @ 16:35 GMT |
Tags: BPE opposes Discos Gencos’ sale reversal
